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Sony was once viewed as the world’s most successful gaming company. After it launched the original PlayStation, many wondered if it could take off until, well, it did. And as we all know, the PlayStation 2 was a gaming juggernaut.

But all of that changed with the PlayStation 3. The console launched at a price that was far too expensive for what customers were getting, and it lacked the uniqueness of Nintendo’s Wii, which caught on quickly. Microsoft’s Xbox 360, while not as popular as the Wii, benefited from a strong online-gaming component.

Sony, therefore, was in trouble. Its console wasn’t selling and its online featureset just couldn’t match its chief competitor. After the PlayStation 3’s price started to fall and Sony offered up some redesigns, the console staged a comeback. Now, it’s succeeding to some degree, though it’s still far behind both of its competitors.

It’s a similar story on the mobile side where Sony’s PlayStation Portable appealed to some gamers, but eventually couldn’t quite match Nintendo’s DS. And with the PlayStation Vita on store shelves now, it appears Sony doesn’t have what it takes to match Nintendo anytime soon.

That Sony might not be able to match the Nintendo 3DS isn’t necessarily all that surprising. What is surprising is that Sony would want to jump into a gaming-handheld market that’s on the decline, due to the success of smartphones and tablets in that space. What’s even more surprising is that it took so long for Sony to even come somewhat close to matching Nintendo on motion gaming and Microsoft on online gaming in the console market.

If you look more deeply at what I just said, you might arrive at a question I’ve been asking about Sony for the last few years: does it really understand the gaming business anymore?

Sony can’t quite see that gaming handhelds is a lost cause

Honestly, I just don’t know. Sony’s mobile hopes are perhaps the most surprising to me. The company has for years evaluated divisions and made tough choices to ensure that it didn’t try to do too much in a market that was slipping away (just look at the Walkman). And yet, it can’t quite see that gaming handhelds is a lost cause.

Over the last few years, iOS and Android have secured an overwhelming portion of portable game revenue. Sony, meanwhile, has been left to pick up only scraps. Considering that was happening before the Vita launched, why would the company even consider spending all of that cash on hardware research and design? That cash could have been more effectively used elsewhere.

At what point will Sony finally see the writing on the wall and realize that it must get out of the handheld market?

Sony should in no way get out of consoles. But that it doesn’t have a more robust online-gaming offering that can match Xbox Live is puzzling to me. Sony must certainly know that online gaming and digital distribution is the future. Why wouldn’t Sony invest far more cash into that market to capitalize on the trend? After all, it’s the smart move.

But actually making the smart moves isn’t something that Sony has been doing much of in the gaming space lately. And the more we consider the moves it’s made, the more we might wonder if it truly understands the industry today.

High-powered consoles and handhelds are great and all. But success in the gaming space today takes much, much more than that. And at least so far, it doesn’t appear Sony gets that.